In my 27 years in automotive, I have always been impressed with future-focused, innovative dealers who adopt a similar approach to running their businesses.
Dealers like these continuously look beyond the success of today, preparing for future market shifts and changing consumer behavior:.
- Twenty years ago, they were the first to invest in interactive websites
- Fifteen years ago they were the ones creating reward programs for their customers
- Ten years ago they were investing in tools to connect service customers with their sales teams.
Over the past couple of decades, these are the dealers I’ve seen stock up inventory when an economic crisis, like the Global Financial Collapse or the recent pandemic, hits.
What are dealers like this doing today? They’re reaching out to past customers and filling up their order banks with hundreds of future sold orders.
Let’s look at some benefits to this strategy:
- It gives your sales team a reason to reach out to past customers earlier in the ownership cycle.
- It secures future business, as customers who have placed orders don’t shop your competition.
- It also secures future trades, which can be as valuable as a new car deal to some dealers.
- It increases future inventory, since dealers with a pipeline filled with orders typically get a larger allocation from the factory.
- It prepares your sales team for the future, rather than keeping them in the comfort zone of yesterday’s business model.
Now is the perfect time for dealers to accelerate their portfolio renewals. Indeed, every time they shorten the ownership cycle by even a month, retention grows.
To quote one top dealer: “This inventory shortage gives us the perfect reason to call customers. Instead of ignoring them because we don’t think we have anything to sell them, we are now reaching out and making appointments to renew them early with an order.”
There is another benefit to this strategy. Every time your sales team says “yes, it’s available” to the customer, they’re winning—and so is the customer.
Spend a few hours in your showroom listening to your sales team and count how many times they tell customers, “No, we don’t have X”. Every time your sales team shares how “tough it is” to get inventory, they’re costing you a customer.
So, what should a dealer’s goal for future sold orders be?
Global data says that top dealers started 2022 with between 20 and 30 sold orders per sales professional. I know dealers planning to go into 2023 with 50 per cent of the year’s sales already ordered. These same dealers are also betting that inventory levels will grow over the year, and so will their allocation.
When they have half of next year pre-sold and inventory levels double from today, can you imagine the sales these dealers will have?
They could very well own their markets.
By Jeff Williams